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Greenhill, the US-listed corporate finance house, has landed its first role advising TUI, Europe's largest travel group, on a defence strategy against potential hostile attacks.

Morgan Stanley raised its stake in the company last week to 10.1% with no explanation of intentions and WestLB, the German bank unwinding non-core assets has had its 31% stake in TUI up for sale for a year.

A spokesman for TUI said the company did not know the intentions of Morgan Stanley. Speculation has been rife that hedge funds are shorting the stock with a takeover on the horizon. The TUI spokesman said the company had no explanation for its share price halving in the last two weeks to €12 per share.

He also said the company had not heard from WestLB regarding the sale of its stake. A spokesman for WestLB said the German landesbank was "under no pressure to sell" its non-core investments.

TUI faces relegation from the DAX-30 index after a fall in its market capitalisation. At 12.20 GMT on Thursday shares were up 5.2% to €14.94 after a strong trading statement giving the group a market capitalisation of €2.6bn ($3.13bn). The shares peaked in the past year at €20.45 valuing the group at €3.65bn.

Greenhill won the mandate to advise TUI on all aspects including its potential relegation from the DAX Index, a defence strategy and the planned €2bn initial public offering of Hapag-Lloyd, its container shipping business. Goldman Sachs, which has advised TUI on other deals, and Citigroup, a lending bank to TUI, are global leaders on the IPO.

The manadate is a coup for Greenhill's German team, led by Colin Roy, who left as Merrill Lynch's co-head of German investment banking in 2000 to set up Greenhill's Frankfurt office. The TUI spokesman said the appointment had sprung from a relationship between Greenhill and Rainer Feuerhake, TUI's finance director.

TUI would be Roy's highest profile deal since Greenhill advised Wella, the German haircare group, on its €3.2bn ($3.9bn) sale to Procter & Gamble. Greenhill did not return calls.

One senior German banker who is not working for TUI said: "TUI usually gives business to its lending banks, so it looks like Greenhill will take on a different role. It would be unusual to see a hostile bid in Germany, and even more unusual if TUI didn't bring in a bulge bracket bank should it enter a hostile situation."

The mandate will come as a blow to TUI's numerous other relationship banks, including Goldman Sachs, Citigroup, Lazard and Dresdner Kleinwort Wasserstein, which has been TUI's consistent M&A advising it on asset sales of more than €4bn over the last two years. It has also used Rothschild and UBS.

WestLB and Royal Bank of Scotland have helped raise debt for TUI this year, and the two banks plus Commerzbank completed a bumper high-yield bond sale this year with substantial investor demand.